SEBI, the capital market regulator, plans to introduce new disclosure rules for listed companies regarding their participation in the ‘green credit’ program.
This initiative falls under the Business Responsibility and Environmentally Friendly Initiative Reporting (BRSR) framework.
Listed companies can earn ‘green credits’ by planting trees in unused lands and areas near rivers.
SEBI, in its consultation paper, mentions that the ‘green credit’ earned by listed companies and their value chain partners can be included as a measure of leadership under principle six of BRSR.
This principle emphasizes the importance of companies taking actions to preserve and rejuvenate the environment.
SEBI mentioned that joining BRSR will inspire listed companies and their value chain partners to contribute to creating green credits through environmentally friendly sustainable actions.
This disclosure aligns with the notification issued by the Ministry of Environment, Forest, and Climate Change in February 2024.
Additionally, SEBI has proposed to redefine the term ‘value chain participant’.
This redefinition now includes the production and distribution partners of the listed entity.
It also encompasses individuals who individually hold two percent or more shares respectively in the purchase or sale of the listed entity by value.
For the first year starting from FY 2024-25, listed companies will have the option to voluntarily include ESG (environmental, social, and corporate governance) disclosures regarding their value chain partners in their annual reports.
These proposals, based on recommendations from an expert committee led by former SEBI whole-time member S K Mohanty, aim to enhance the ease of doing business within the BRSR framework.
SEBI has requested feedback from the public regarding the proposals by June 12th.
